Shrinking health insurance policies are a pragmatic response to the changing economic situation across the Gulf countries, including the UAE, where oil revenues have been lower for several months and budgets continue to be under pressure.
The Health Authority Abu Dhabi introduced new regulations in April, cutting benefits for both Emiratis and expats employed by government departments and associated agencies. Other health authorities – Dubai Health Authority and the Ministry of Health– also changed their insurance standards. The same has been happening in Oman and Qatar, where governments have also moved to trim benefits.
While this is inconvenient for those patients and major hospitals who will be significantly affected by these cuts, they will bring benefits for the overall healthcare system in the long run. The insurance system is still developing and needs constant assessment and provisions. The market, as Ala Atari, chief executive of Medcare Hospital, said: “needed some reorganisation” to boost efficiency and reach long-term stability. Companies that have been offering health benefits in excess of the regulatory requirement will now have to review their cover and shift to lower-cost providers or packages to save money.
But saving is not the only benefit that can be reaped from the new insurance policy standards. Reorganisation would help prevent some abusive practices, such as up-coding, unbundling of claims for reimbursement and the payment of referral commissions. For example, when HAAD replaced full dental cover for Emiratis at private dental clinics with 50 per cent co-pay in 2009, it notably decreased the amount of fraud, waste and abuse. It will also increase competition among private healthcare providers since they will have to make more effort to attract more patients.
However, consumers should also be offered the opportunity to top-up their policies to allow them to extend their existing health insurance cover at a low cost. Such plans can come in handy for those who reach the threshold of the existing health cover while there are some medical costs left to deal with. In some cases, additional coverage would avoid putting pressure on savings or emergency funds. Both insurance companies and individuals would be at an advantage.
